Fortune Theatre and Southern Sinfonia representatives are anxious about a Creative New Zealand review of funding operations due next week.
The Government's principal arts funding body has foreshadowed sweeping changes to the way it funds arts organisations.
The results of the review will be announced on Tuesday.
"There will be changes in the levels of funding to organisations and may well be changes to the mix of organisations we support," Creative New Zealand spokeswoman Hannah Evans said.
Creative New Zealand provides $15,265,400 of recurrent funding to 34 organisations, including Dunedin's Fortune Theatre ($480,000 per annum) and Southern Sinfonia ($315,000 per annum). Southern Sinfonia manager Philippa Harris said it would be a nervous wait.
"At the moment, we're definitely on edge," she said yesterday.
"In a worst-case scenario, if the orchestra wasn't here, there would be far fewer music teachers, because half our players are music teachers.
"If you don't have the teachers, you don't have the students and the whole thing dries up. That's what's at stake here.
"We already operate on an absolute shoestring. The level of funding we get is nowhere near enough. It's never been enough.
"We really struggle to maintain quality and the question is whether we get to maintain a certain level of quality."
Ms Harris attended a forum in Christchurch in March, with former Fortune Theatre Trust chairman Robert Aitken and interim manager Karen Elliot, to make submissions on the review.
"What concerns me is that they're up there in Wellington and they're removed from things down here and they may not be aware how important the Sinfonia and Fortune are - they're vital to our culture. That grass-roots stuff is so important.
"The Fortune and the Sinfonia fulfil such a hugely important role, because we have such a huge area in Otago and resources are so scarce ... we have a nationally strategic role."
Ms Harris said she had been given "no indication" of a possible outcome, but Creative New Zealand had advised its funding arrangements would end in December 2011.
Any changes resulting from the review were expected to come into effect from January 2012.
A Fortune Theatre source said any reduction in funding could threaten the viability of southern arts organisations.
"I am very nervous that it will follow the path of population-based funding that central Government seems to enjoy treading.
"This could mean that, in terms of theatre, there may be nothing given recurring funding south of Christchurch."
